EMPLOYMENT CREATION AND HUMAN RESOURCE ISSUES
IN TOURISM

Tamara Ratz - Laszlo Puczko
Budapest University of Economic Sciences

Research Project Funded by the Hungarian National Scientific Research Fund
1996-1998
Registration number: F019731

TOURISM AND EMPLOYMENT
In Hungary, tourism is one of the most rapidly developing industries of the economy. According to the estimates of the Hungarian Tourism Inc., approximately 250.000 - 300.000 persons are employed in tourism. As certain types of tourism (like rural or nature-based tourism) can provide a development alternative for currently under-developed regions, tourism seems to be an effective and efficient tool in creating new jobs and thus decreasing unemployment even in these areas (which, due to their low level of economic and infrastructural development, are the least attractive targets for other investors).

Tourism employment can be categorised as (Mathieson & Wall, 1982)

The reason for not having an exact figure for the number of persons employed in tourism in Hungary is twofold: first, the accuracy of statistical data collection falls behind the expectations, but, secondly, it is very difficult to define what proportion of the total final demand in the economy is due to tourism, i.e. what is the contribution of tourist spending directly and indirectly to employment creation and what is the effect of the tourism multiplier. Consequently, there is no a widely accepted categorisation of tourist employment available, so the first step of our research was to complete a tourist job catalogue in Hungary.

In the international tourism research literature, different employment categories have been created on the basis of different definitions of tourism. The most commonly used definition is the following: "Tourism is the temporary movement of persons to destinations outside their normal home and workplace for leisure, business and other purposes, the activities undertaken during the stay and the facilities created to cater for the needs of tourists." (WTO, 1989). For the purpose of investigating the economic impacts of tourism, the definition of the WTTC seems to be more appropriate, though, in our case, too wide to apply (due to temporal and financial constraints): "The Travel and Tourism industry is defined by the economic activities (personal, investment, government, business and net export) associated with travel as measured by the wide variety of current and capital expenditures made by or for the benefit of a traveller before, during and after a trip" (WTTC, 1995).

Though expenditures before and after tourist trips may arise as a consequence of travelling, most services provided to the tourists have to be delivered at the time and place at which they are produced (Hansen & Jensen, 1996). If we define tourism's economic impacts as economic benefits and costs which accrue to destination areas as a consequence of tourism development, tourist expenditures should be considered from the perspectives of the local, regional and national economies of tourist destinations. For them, the essential factors are the tourists' expenditures during their stay. In this research, we accept this approach, and, in defining tourism employment, we only consider expenditures made by or for the benefit of a traveller during a trip.

Tourism is generally known as one of the sectors where the costs of a new job are significantly less than in other industries, though some researches have come to an contrasting conclusion. Obviously, the characteristics of employment and the effects of tourism development vary according to the type of tourist activity, some types of tourism being more labour-intensive than others. Accommodation facilities and the hospitality sector in general employ a substantial proportion of the tourism labour force, but they also require relatively large capital investments. The financial resources required to generate employment also vary with the size of companies, the types of skills needed, the economic development of the destination area, etc.

Due to the lack of a widely accepted categorisation of tourist employment, together with the complexity of factors to be taken into consideration, the main contributing factors to the overall cost of employment creation in tourism are not clearly defined. Thus one of the main purposes of our research is to define the set of factors determining the costs of tourism employment generation and to incorporate them into a model that is able to present their respective role and their interrelationships.

HUMAN RESOURCES IN TOURISM
The second main aim of our research is to analyse the characteristics of tourism employment in Hungary. It is assumed that these characteristics vary in the different subsectors with the size of the company, the type of ownership (private or public), the age of the company, etc. The main fields to be investigated during this research are the following:

As there is now universally accepted job catalogue for tourist employment, our first task was to complete a catalogue of tourist employment in Hungary (at a later stage the possibility for internationalisation will also be considered). The catalogue involves both directly and indirectly affected subsectors (e.g. hospitality, accommodation, tour operators, travel agents, transportation, non-profit tourist offices, etc.). The criteria for being listed in the catalogue as a subsector providing direct or indirect tourist employment is the rate of turnover from tourism as opposed to the total turnover of any given subsector.

METHODOLOGY
Research methods at this stage of the investigation include secondary research (references to employment creation, tourist employment and human resource management studies in Hungary) and a mail questionnaire survey of enterprises directly or indirectly involved in tourism. Though the ultimate aim is to examine the characteristics of employment creation human resource management in tourism in Hungary, our current financial constraints have limited the survey to one of institutions and companies in Budapest. The sample size was set at 1000 questionnaires (actually 1003 questionnaires were sent out, due to last minute inclusion of additional educational institutions). The sample is based on the job catalogue completed in the first phase of the research process and represents the subsectors included in the catalogue. During approximately 2 months, we have received 304 filled in questionnaires, i.e. we have achieved a 30,3% response rate which can be considered as a good result in the case of a mail survey without any special initiative to stimulate response. We have also received back 92 questionnaires due to closing-down or moving of companies. Since we have used the data most recent editions of the Hungarian Contact Guide for Tourism and of Hungary Info as a base population for our survey, this relatively large number reflects the high fluctuation rate characteristic to the Hungarian tourism industry.

Because of the different sizes of the subsectors involved in this survey and the limitation concerning the sample size, the sample doesn't represent equally all the subsectors. Generally we have selected a certain percentage of the companies belonging to a given subsector (this percentage varies from 10 to 30%, depending on the number of members), but in certain cases, where this number was too small, we have included all the members (like in the case of educational institutions involved in tourism for example). In the further analysis of the findings, this particularity will be given due consideration.

The mail questionnaire survey covers most of the issues presented above. The next steps of the research project include expert interviews and, as a synthesis of the empirical findings, design of a model of employment creation in tourism.

TOURISM EMPLOYMENT IN BUDAPEST
The participants of sample in the survey can be categorised as institutions (cultural attractions, educational institutes, government offices, nature protection agencies, professional organisations, etc.) and as businesses (accommodation facilities, tour operators and travel agencies, restaurants and other F & B services, retailers, transportation, personal services, guiding, financial services, sports facilities, etc.). The main factor dividing the two categories is profit-orientation. The distribution of the two main groups can be seen in Table 1.
 
 

Table 1. DISTRIBUTION OF RESPONDENTS ACCORDING TO MAIN PROFILE

 
Business Number Institution Number
Tour operation, travel agency 98 Cultural attractions 14
F & B 60 Education 5
Accommodation 48 Administration (local governments, state bodies) 4
Retailing 16 Nature protection agency 3
Event management 15 Sports facilities 3
Hostess-service, guiding 11 Information bureau, representation 2
Transportation 9 Professional organisations 1
Financial services, insurance 6 Other attractions 1
Consultancy 4    
Media 2    
Sports facilities 1    
Personal services 1    
Altogether 271 Altogether 33

The total number of jobs created by the respondents was calculated on the basis of their staff number and the ratio of their turnover from tourism as opposed to their turnover in general (for businesses) or the ratio of their activities related to tourism as opposed to their activities in general (for institutions). According to this method, the sum of jobs created by tourism was 40,531, and the average number of employees by participant was 133.33, but these figures included the data of two large companies with an employment figure higher than 10,000. If these businesses are not included, the sum of jobs for the rest of the sample was 8,513.6, the average by respondent was 28.19. Among the jobs created, only 9.3 per cent rate as seasonal jobs (it must be remembered that tourist demand in Budapest shows little seasonality) and 9.4 per cent as part-time jobs. The average weekly worktime of part-time employees was 19.59 hours. Distribution by gender was the following: 42.6 cent of the employees in tourism were male, 57.4 per cent were female.

In average, the respondents were considered as tourist businesses or institutions in 71.2 per cent.

The average monthly salary of full time employees was 50,140 HUF (app. 250 USD) as opposed to 26,546 HUF (app. 133 HUF) for seasonal employees.

Among all the employees of the survey's participant, 7.8 per cent had university or college degree, 66.8 per cent completed secondary education, 25.34 per cent completed only primary education. Seasonal employees showed a greater tendency to have higher degrees or only primary education than annual employees.

Employees have in average worked for 4.7 years for the same company or institution. Fluctuation was slightly greater in the case of medium-sized or large companies.

RECRUITMENT OF NEW EMPLOYEES
In recruiting new employees, recommendations of friends and business partners were considered as far the most important source (85.5 per cent of the respondents utilise this channel regularly). The main reasons for choosing new employees through personal contacts were the following: opportunity to collect reliable information on the skills and characteristics of potential candidates; highest perceived credibility of this information; personal recommendations offer a certain degree of guarantee concerning the future performance of the new colleagues; previous experiences proved this method of recruitment to be the most appropriate.

The second most popular recruitment channel (among 57.2 of the respondents) was advertising in newspapers and magazines. This method was considered to be fast and relatively cheap, simple, but efficient, reaching the highest number of potential candidates. Newspaper advertisements also provided the companies with the possibility to summarise qualifications, skills and characteristics required for filling a position, thus they have to deal only with suitable candidates.

Though building relationships with schools (vocational schools, colleges, universities) in order to find new employees is getting more and more popular also in Hungary, only app. one fifth (21.7 per cent) of the companies participating in this survey use this channel for recruitment. The advantages of this method were the consequent match between the employer's requirements and the contents of the schools' educational programmes;

Finally, only 15.1 per cent of the respondents use employment agencies, although this method was considered to be traditionally utilised, and relatively fast and simple. The questionnaires didn't contain to much explanation for this low ratio, one reason mentioned was that most employment agencies are not interested in working for the tourist industry. Other possible reasons include that employment agencies are generally considered as being too high-profile (thus too expensive) for smaller companies, or, quite the contrary, as trying to find jobs for low-qualified, unskilled, unemployed persons (i.e. not being able to provide suitable candidates for the tourism industry).

REQUIREMENTS CONCERNING NEW EMPLOYEES
If employment creation is to be analysed in a wider sense, the costs of education needed for new employees should also be taken into consideration. Education is one of the tools for potential employees to acquire the knowledge and skills they are supposed to have in order to fill a position. Employment criteria include academic qualifications, language proficiency, other skills like computer literacy or driving license, professional experience or personality traits. The candidate's performance in interviews or the results of IQ tests or any other evaluation methods can also be of great importance.

In this survey, the two most important criteria taken into consideration concerning new employees were the applicant's foreign language skills (by 65.1 per cent of the respondents) and their professional experience (63.2 per cent). Foreign languages have traditionally been very important in the tourism industry (in Hungary's case, the most frequently spoken foreign languages are German and English). The latter figure indicates the perceived inadequalities of formal education and the high value that employers attach to the type and quality of previous jobs.

Academic and professional qualifications relevant to the job were taken into consideration by 48 per cent of the respondents. Almost equally important (45.7 per cent) were personality traits, like friendliness, communication skills, openness, dynamism, a positive approach to problems, etc., all are so crucial in tourism where the human factor plays a major role in the overall experience of the tourist.

Also almost the same significance were attached to the candidate's performance during the selection process (26.6 per cent) and to other skills like computer literacy or driving license (24.7 per cent). More and more companies utilise special tests, problem-solving exercises, role-plays or other tools to assess the applicants' intelligence, personal strengths and weaknesses, and, as also this survey indicates, companies gradually learn to trust the results.

Although the age and gender of the applicants were considered to be the least important among all the criteria, 17.8 per cent of the respondents took age into consideration, obviously preferring young candidates (because they are supposed to be more flexible and more willing to learn new things), even though their professional experiences would be more limited than that of their older competitors. In general, most companies don't want to employ new graduates, but long experience in the previous, socialist economy doesn't provide too much advantage either to the potential employees.

Gender rated as the far least important criterion, since it was chosen by 4.3 per cent of all the respondents. But even this low ratio is relatively high, since it is in contrast with the principle of providing equal opportunities to everyone.

TRAINING AND EDUCATION OF EMPLOYEES
In the last 5 years, app. 75 per cent of the participating companies have organised on-the-job training for their employees or contributed to their participation in external educational courses or training, and 48 per cent of all the employees have participated in any form of education or training. In average, each of these companies has spent 34,329 HUF (app. 171 USD) on further training or education of an employee. The fields where employees particularly needed to develop their knowledge were the following: especially foreign languages and computer skills, then sales knowledge, marketing, communication skills, accounting and taxation, professional knowledge in general, etc.

The continuously modified administrative and financial rules in Hungary (due to the economic and political transition) make constant adjustment necessary for companies and this need is also indicated in the retraining and education of employees. The other reason for the relatively high ratio of respondents that contribute to their employees' training is that in tourism, on-the-job training is often more important than formal education. Besides the basic professional knowledge, employees also need to learn the special operating rules and characteristics of their respective companies and this is only possible in the job.

CONCLUSIONS
The presented survey aimed to investigate the basic characteristics of employment in Budapest's tourism. More than half of the respondents were small companies and institutions (with 10 or less employees), with, on average, 71.2 per cent involvement in tourism. Since the mail survey has just been completed, the in-depth analysis of the findings is the next step of the research project. The first results show that tourism in Budapest is not significantly different from any other service industry in any human resource aspect. Companies directly involved in tourism tend to be small or medium-sized companies with a relatively stable staff, providing jobs both for men and women (though women's share is slightly higher). Low-level education is characteristics to app. 25 per cent of all employment and most jobs are annual and full-time (so, at least in Budapest, tourism can not be blamed for creating mostly seasonal jobs for low-skilled workers).

Further steps of the project include expert interviews in the tourism industry, and, as a synthesis of the empirical findings, design of a model of employment creation in tourism.

REFERENCES

 
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